EXHIBIT 10.15

                                  AGREEMENT


      This Agreement is among THE MERCHANTS BANK, a Vermont banking 
corporation with a principal place of business in Burlington, Vermont (the 
"Bank") and KATHRYN T. BOARDMAN, THOMAS R. HAVERS and SUSAN D. STRUBLE 
(individually, a "Participant" and collectively, the "Participants") and is 
effective as of the date specified on the execution page of this Agreement 
(the "Effective Date").

                                 Background
                                 ----------

      1.  The Bank and the Participants are parties to Salary Continuation 
Agreements dated June 1, 1989 (the "Salary Continuation Agreements").

      2.  The Bank desires to amend the Salary Continuation Agreements and 
the benefits payable thereunder, and the Participants are willing to agree 
to such amendments.

                        N O W ,  T H E R E F O R E ,

      In consideration of the premises and the mutual covenants and 
agreements herein set forth, the parties hereby agree as follows:

      Section 1.  Bank to Establish Trust.  The Bank shall establish, on the 
Effective Date, and thereafter shall maintain in accordance with this 
Agreement, a so-called rabbi trust in the form attached hereto as Exhibit 
"A" (the "Trust").  The Bank shall contribute to the Trust, on the Effective 
Date, the sum of $160,863.

      Section 2.  Deferral Account.

      (a)  The Bank shall establish a bookkeeping account (a "Deferral 
           Account") for each Participant to record the amounts due under 
           this Agreement.

      (b)  On the effective date of this Agreement, in lieu of any amounts 
           that the Bank otherwise would be obligated to pay to any 
           Participant under or on account of the Salary Continuation 
           Agreements, the Bank shall be and become obligated to distribute 
           to each Participant, at the times and as provided in this 
           Agreement:  (i) that number of shares of Merchants Bancshares, 
           Inc. set forth on Schedule 2(b) opposite such Participant's 
           name; plus (ii) all dividends, distributions or other 
           consideration paid on, on account of, or in exchange for such 
           shares prior to their distribution as herein provided.  
           Notwithstanding the provisions of the immediately-preceding 
           sentence:  (y) in the event of a merger, consolidation or 
           reorganization of Merchants Bancshares, Inc., the Bank shall be 
           obligated to distribute, in lieu of the shares of Merchants 
           Bancshares, Inc. referred to above, such shares or other 
           property as shall have been exchanged for said Merchants 
           Bancshares, Inc. stock, or into which said Merchants Bancshares, 
           Inc. shares shall have been converted pursuant to such merger, 
           consolidation or reorganization; and (z) in the event of a 
           Change of Control (as defined below), the Bank shall have the 
           option, to be exercised (if at all) not earlier than sixty days 
           prior to such Change of Control nor later than sixty days 
           thereafter, and to be effective not earlier than the time when 
           such Change of Control occurs nor later than one hundred eighty 
           days thereafter, to provide that in lieu of any obligation 
           thereafter to distribute shares of Merchants Bancshares, Inc., 
           the Bank thereafter shall be required to pay or distribute to 
           each Participant, in cash or in securities, a variable amount 
           that equals the value from time to time of the balance posted to 
           the bookkeeping account maintained for such Participant in the 
           Trust, provided, however, that to the extent the balance posted 
           to the credit of such Participant in the Trust has been reduced 
           as a result of any withdrawals from the Trust for any purpose 
           other than a payment to or for the benefit of the Participant or 
           the Participant's designated beneficiary (see Section 6, below), 
           the amount to be paid or distributed to such Participant shall 
           be adjusted to take into account both such withdrawal(s) and the 
           earnings (or losses) that would have been credited to the 
           Participant's account under the Trust if such withdrawal(s) had 
           not occurred.

      A "Change of Control" shall occur upon the earliest of the following:

      (A)  any "person," as such term is used in Sections 3(a)(9) and 13(d) 
           of the Securities Exchange Act of 1934 (a "Person"), becomes a 
           "beneficial owner," as such term is used in Rule 13D-3 
           promulgated under such Act (an "Owner") of twenty-five percent 
           (25%) or more of the Voting Stock, as defined below, of 
           Merchants Bancshares, Inc.; or

      (B)  the majority of the Board of Merchants Bancshares, Inc. consists 
           of individuals other than the Incumbent Directors;

      (C)  Merchants Bancshares, Inc., or the Bank, adopts any plan of 
           liquidation providing for the distribution of all or 
           substantially all of its assets;

      (D)  all or substantially all of the business of Merchants Bancshares, 
           Inc. is disposed of pursuant to a merger, consolidation, or 
           other transaction in which Merchants Bancshares, Inc. is not the 
           surviving corporation or is substantially or completely 
           liquidated (unless the shareholders of Merchants Bancshares, 
           Inc. immediately prior to such merger, consolidation, or other 
           transaction beneficially own, directly or indirectly, in 
           substantially the same proportion as they owned the Voting Stock 
           of Merchants Bancshares, Inc., all of the Voting Stock, or 
           correlative ownership interests, of the entity or entities, if 
           any, that succeed to the business of Merchants Bancshares, 
           Inc.); or

      (E)  Merchants Bancshares, Inc. combines with another company and is 
           the surviving corporation but, immediately after the 
           combination, the shareholders of Merchants Bancshares, Inc. 
           immediately prior to the combination (other than shareholders 
           who, immediately prior to the combination, were "affiliates" of 
           such other company, as such term is defined in the rules of the 
           Securities and Exchange Commission) do not beneficially own, 
           directly or indirectly, fifty percent (50%) or more of the 
           Voting Stock of the combined company; or

      (F)  Merchants Bancshares, Inc. transfers to any Person or Persons not 
           controlled by Merchants Bancshares, Inc.:  (1) fifty percent 
           (50%) of the Voting Stock of the Bank; or (2) forty percent 
           (40%) or more of the assets of the Bank.

      Notwithstanding the occurrence of any of the events described in 
clauses (A), (D) or (E), above, no "Change of Control" shall be deemed to 
have occurred if:

      (1)  immediately following such event, members of the Board or 
           employees of Merchants Bancshares, Inc. and its subsidiaries who 
           file or are required to file (or immediately prior to such 
           event, filed or were required to file) reports under Section 
           16(a) of the 1934 Act) are beneficial owners, directly or 
           indirectly, of twenty-five percent (25%) or more of the Voting 
           Stock of Merchants Bancshares, Inc. or its successor, as the 
           case may be; or

      (2)  such Change of Control event occurs as a result of a proposal 
           initiated by the Board of Merchants Bancshares, Inc. (and not as 
           a result of prior actions taken by the Person or Persons 
           effecting the Change of Control), and if at the time of making 
           the proposal, the Board of Directors notifies the Fixed Growth 
           Plan Participants that any such Change of Control event 
           resulting from the proposal shall not constitute a Change of 
           Control.  For this purpose, a Change of Control event shall be 
           considered to result from a proposal if the event occurs because 
           of the acquisition of stock or assets of Merchants Bancshares, 
           Inc., directly or indirectly, by Persons, or a group of some of 
           whose members are Persons, identified in the written notice 
           described above.

      "Incumbent Director(s)" shall mean the members of the Board of 
Merchants Bancshares, Inc. on the date of this Amended Plan, provided that 
any person becoming a director subsequent to the date of this Amended Plan 
whose election or nomination for election was approved by two-thirds (but in 
no event less than two) of the directors who at the time of such election or 
nomination comprise the Incumbent Directors shall be considered to be an 
Incumbent Director.

      "Voting Stock" of any corporation shall mean the capital stock of any 
class or classes having general voting power under ordinary circumstances, 
in the absence of contingencies, to elect directors of such corporation.

      Section 3.  Distribution of Deferral Account.

      (a)  Commencing on January 2 of the year following the Participant's 
           attaining the age of sixty-five (65) or the Participant's 
           earlier death ("Termination Date"), the Bank shall commence 
           distribution and/or payment of the Merchants Bancshares, Inc. 
           shares and/or other amounts which the Bank is obligated to 
           distribute and/or pay pursuant to this Agreement.  On or 
           promptly following such January 2, and on or promptly following 
           each subsequent January 2, the Bank shall distribute or cause to 
           be distributed to the Participant:  (i) a portion of the total 
           number of shares of Merchants Bancshares, Inc. specified on 
           Schedule 2(b) and required then, if at all, to be distributed to 
           the Participant under this Agreement, minus the number of such 
           shares previously so distributed; and (ii) a portion of the 
           balance of the value of the Participant's Deferral Account 
           valued as of the last business day of the immediately-preceding 
           calendar year (excluding from such valuation, however, any 
           shares of Merchants Bancshares, Inc.).  The fractional share to 
           be distributed shall have:  (a) a numerator of 1; and (b) a 
           denominator equal to (i) 15 minus (ii) the aggregate number of 
           previous annual distributions made to the Participant pursuant 
           to this Section 3.  All such valuations in each case shall 
           include all adjustments required to be made pursuant to this 
           Agreement.  With respect to distributions other than those 
           required to satisfy the Bank's obligations to distribute shares 
           of Merchants Bancshares, Inc., distributions may be made in cash 
           or in the form of negotiable securities held under the Trust 
           Under The Merchants Bank Amended and Restated Deferred 
           Compensation Plan for Directors (the "Trust") (such securities 
           shall be valued at their fair market value as of the date of 
           distribution as reasonably determined by the Bank or its 
           designee).

      (b)  Notwithstanding the provisions of Section 3(a), above, to the 
           extent, if at all, that the Bank is provided with evidence 
           reasonably satisfactory to it that all or part of the shares or 
           other amounts to be distributed to the Participant or the 
           Participant's beneficiary are includible in the Participant's or 
           such beneficiary's taxable estate for estate tax purposes, and 
           increase the estate taxes otherwise payable by such estate, the 
           Bank shall promptly distribute or pay to the person(s) or 
           entity(ies) entitled thereto, the entire remaining amounts 
           payable by the Bank under this Agreement to such person(s) or 
           entity(ies).

      (c)  Notwithstanding the provisions of Section 3(a), above, a 
           Participant may request, and the Bank may approve, a 
           distribution due to hardship by submitting a written request to 
           the Bank's Board of Directors accompanied by evidence to 
           demonstrate that the circumstances being experienced qualify as 
           a hardship.  If a hardship is found by the Bank, the 
           distribution shall be limited to an amount sufficient to meet 
           the emergency. 

      (d)  For purposes of Section 3(c), "hardship" means a severe financial 
           hardship to the Participant resulting from a sudden and 
           unexpected illness or accident of the Participant or a dependent 
           of the Participant, loss of the Participant's property due to 
           casualty, or other similar extraordinary and unforeseeable 
           circumstances arising as a result of events beyond the control 
           of the Participant.  The circumstances that will constitute a 
           hardship will depend on the facts of each case.  However, in no 
           event shall payment be made if such purported hardship is or may 
           be relieved:

           (i)    through reimbursement or compensation by insurance or 
                  otherwise;

           (ii)   by liquidation of the Participant's assets, to the extent 
                  that such liquidation would not itself cause severe 
                  financial hardship; or

           (iii)  by the Participant's ceasing deferrals under the Plan.

           In no case shall the need to send a Participant's child to 
           college or the desire to purchase a home be considered a 
           hardship.

      Section 4.  Nature of Accounts.

      (a)  Except as provided in the Trust:  all amounts credited to or held 
           in the Trust shall remain the sole property of the Bank and 
           shall be usable by it as a part of its general funds for any 
           legal purpose whatever; the bookkeeping account referred to 
           herein shall exist only for the purpose of facilitating the 
           computation of payments hereunder; nothing contained in this 
           Agreement and no action taken pursuant to the provisions of this 
           Agreement shall create or be construed to create a trust or 
           escrow of any kind, or a fiduciary relationship between the Bank 
           and the Participants or any Participant's designated beneficiary 
           or any other person; and to the extent that any person acquires 
           a right to receive payments from the Bank under this Agreement, 
           such right shall be no greater than the right of any unsecured 
           general creditor of the Bank.

      (b)  It is the intention of all parties that the Participants' rights 
           under this Agreement be unfunded for purposes of the Internal 
           Revenue Code of 1986, as amended, and Title I of the Employee 
           Retirement Income Security Act of 1974, as amended.

      Section 5.  No Reductions.  The amounts to be paid to the Participants 
hereunder, and the dates on which such payments shall be due, shall under no 
circumstances and in no event be subject to reduction, curtailment or 
deferral.

      Section 6.  Beneficiary Designation.  Each Participant may designate 
one or more beneficiaries to receive, in the event of his or her death, all 
amounts which are then and thereafter payable under this Agreement.  Such 
designation and any subsequent changes thereto shall be made in writing and 
filed with the Treasurer of the Bank.  In the event of a Participant's death 
prior to receipt of the total amount due to him or her hereunder and without 
a then-effective beneficiary designation, the balance shall be paid to the 
Participant's spouse, if then living, and otherwise to his or her estate.

      Section 7.  Nontransferability.  No right to payment under this 
Agreement shall be subject to anticipation, alienation, sale, assignment, 
pledge, encumbrance or charge, and any attempt to anticipate, alienate, 
sell, assign, pledge, encumber or charge the same shall be void.  No right 
to payment shall, in any manner, be liable for or subject to the debts, 
contracts, liabilities or torts of the person entitled thereto.  If, at the 
time when payments are to be made hereunder, a Participant or any 
beneficiary is indebted to the Bank, then any payments remaining to be made 
hereunder may, at the discretion of the Bank, be reduced by the amount of 
such indebtedness.  An election by the Bank not to reduce such payments 
shall not constitute a waiver of its claim for such indebtedness.

      Section 8.  Full Release.  The provisions of this Agreement are in 
full and final satisfaction of any and all claims which the Participants 
have or may have against the Bank under or on account of the Salary 
Continuation Agreement.

      Section 9.  Successors and Assigns.  This Plan shall be binding upon 
and inure to the benefit of the Bank, its successors and assigns, and the 
Participants and their respective heirs, executors, administrators and legal 
representatives.

      Section 10.  Governing Law.  This Plan shall be governed by and 
construed in accordance with the laws of the State of Vermont, without 
giving effect to such jurisdiction's principles of conflict of laws.

      IN WITNESS WHEREOF, the Bank and the Participants have executed this 
Agreement as of the 20th day of December, 1995.


                                       THE MERCHANTS BANK


/s/ Kathryn T. Boardman                By: /s/ Joseph L. Boutin
------------------------------         -------------------------------
Kathryn T. Boardman                        Its President and
                                           Chief Executive Officer

/s/ Thomas R. Havers
------------------------------
Thomas R. Havers

/s/ Susan D. Struble
------------------------------
Susan D. Struble